US rig count up for 14th straight week, more than double this time last year

The rig count in Texas rose by six last week to end at 420. Anadarko photo.

US oil rig count up to 688, highest since April, 2015

Baker Hughes reported on Friday that the US rig count increased for the 14th straight week, building on an 11-month recovery that is expected to see a continued boost in US shale production.

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More than doubling the 343 active rigs recorded at this time last year, US drillers added five oil rigs in the week ending April 21, bringing the total rig count to 688, the highest since April, 2015.

In Canada, the rig count dropped below 100 as the number of active rigs fell by 19 to 99.

Increased US shale production is overshadowing OPEC production cuts on the market.  On Friday, US crude futures fell below $50/barrel for the first time in two weeks and putting it on track for the biggest weekly loss in six weeks.

Analysts are expecting the biggest monthly increase in US shale production in over two years to happen in May as drillers boost activity, according to US energy data.

According to a Reuters report, futures for the remainder of 2017 are getting around $50/barrel and calendar 2018 was trading at about $51/barrel.

2016 was a tough year for US shale producers with dozens of companies filing for bankruptcy.  Preqin data shows that in 2017 Q1, private equity equity funds raised $19.8 billion for energy ventures, nearly three times the total compared with the same time last year.

This week, analysts from Simmons & Co and energy specialists at Piper Jaffray forecast the total oil and gas rig count in 2017 will average 842, 1,037 in 2018 and 1,170 in 2019 with most wells producing oil and gas.

That compares to an average of 742 so far this year, 509 in 2016 and 978 in 2015, according to data from Baker Hughes.

Cowen & Co analysts said in a note this week that its capital expenditure data showed 57 E&P companies planned to boost spending by an average of 50 per cent in 2017 over 2016.  In 2016, there was a decline in spending of an estimated 48 per cent and in 2015, expenditures fell by 34 per cent, Cowen reported of the 64 E&P companies it tracks.